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Chrysler Canada to see tougher competition

by David Zatz on


The Canadian government has agreed to phase out its 6.1% imported-vehicle tariff on South Korean automakers, most notably Hyundai (which includes Kia), over the opposition of Canadian automakers.

In 2012, according to Ford, Canada brought in 131,000 Korean vehicles, while exporting 3,000, even with the tariff in effect. Japanese automakers also opposed the deal, according to Automotive News, which suggested that they changed their minds when realizing they would be next in line to get a deal characterized by some critics as “free but not fair.”

Spokesmen for Prime Minister Harper said that 88% of vehicles made in Canada are exported anyway, mainly to the United States. GM, Ford, Chrysler, and Toyota all assemble cars in Canada; Chrysler’s market share in Canada is far higher than in the United States.

The government said the agreement would boost Canadian exports to South Korea by one-third, to  C$1.7 billion per year.  Canada’s deal follows pacts between the United States and European Union with South Korea, which some believe led Canadian exports to the Asian nation to fall by 32% over two years. The deal will cut 98% of duties between the two countries; South Korea puts an import penalty of 13% on Canadian goods, while Canada’s duties are around 4%, according to Automotive News

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